The list of million dollar homes up for sale continues to grow, but their prices are also slowly dropping.
According to RedFin, a real estate company, the sales of homes priced at $1 million or more increased by 14 percent (or an equivalent of 24,064 homes) over the same quarter a year ago. Sales of homes priced at $5 million or more also jumped 20 percent.
Still, prices for luxury real estate seem to be getting a bit rich, even for the rich. Prices for million-dollar-plus homes were flat, and prices for homes priced at $5 million or more fell 1.2 percent. The decline marks the second-straight quarter of price drops.
At the same time, inventory is creeping up. There are now 65,000 million-dollar homes for sale in the U.S., and more than 4,000 homes priced at $5 million or more.
Nela Richardson, chief economist for RedFin, said that the decrease of foreign buyers is due to the recession being experienced overseas, or in countries such as Greece and China, who are more likely to spend a million dollars to have a place of their own in the United States.
"There are a lot of global issues playing out," Richardson said. "We had Greece, China and Western Europe. And we saw retrenchment in South America. So all over the globe, foreign buyers pulled back a bit," the economist said.
Richardson added that even the richest investors around the world would now back down if the price is too high.
The most luxurious home sold in the quarter is a 15,000-square-foot mansion in Holmby Hills with 10 bedrooms and 12.5 baths, set in seven acres of land. The mansion was sold for nearly $59.4 million.
It is projected that million-dollar-home sales will continue to be strong for the remainder of 2015 and into next year, but those sales, at just under three percent of the market, will have a limited impact on the overall sales growth in 2016.
